What should I do?

teadrinker1

I'm 34, live in London, earn about 30k. That is unlikely ever to change...or if it does, it will go down. I'm not in a particularly secure job, although it's as secure as anything else these days I suppose. i'm single. Again, unlikely that will change

In rented accommodation, sharing with a friend, rent is 560 pcm plus bills.

I'm managing to save £500 per month at the moment. I've saved about £20k over several years, all of it in cash ISAs.

My parents have kindly said they would give me another £20k if I needed it (eg for a masters, which I am not going to do, or flat or something).

My pension is almost nil, my employers are paying in 5 per cent of my salary atm but that only started recently.

I'm worried about the future...I've started to think about a pension, how I am going to provide for myself, etc.

So what do you think is best? I suppose in a couple of years I could buy a small flat on the outskirts, if I put down a large enough deposit. But it seems so expensive with all the moving costs, solicitors fees and I'd have to pay all my monthly bills on my own.

In the longer term am I better off buying a flat or should I just continue sharing and put my savings in a stocks and shares ISA?

Or should I just give up?

thanks...

snooping_around

...........

teadrinker1

you're right snooping. my thoughts exactly

ta

Theyarv1

If i were in your situation I would plan to continue saving as you are doing for those 2 years and reassess the housing market then. I'm personally pro owning a house if it's in your means, especially outside of London.

theoretica

Hmm, I can't see the state giving me enough funds to have all the fun I hope to in retirement!

My plan is to own a property outright by the time I retire so I am rent/mortgage free. Hope the state pension covers essentials. Save enough/have my own pension to have at least as much spending money as I use now.

You wouldn't have to pay all your bills by yourself - many people rent a room out.

JoeCrystal

Well, make sure you save into pension anyway. Are you paying into it as well or just your employer paying 5% into it? That roughly is £125 per month. If you are planning to retire at 65, then that will only yield £3,444 income per year according to HL pension calculator . How high does your employer match your contribution anyway? I am banking on the fact if company pay 5% without your contribution then that might suggest it will pay in more if you pay in more basically.

The basic State Pension is just over £5,000 per year (. But you could at least expect £7,000 per year at least I guess. And you get it at 67 (though it is likely to be higher by the time you get there) So is £10,000 per year is enough for you?

There is The Pensions, Annuities & Retirement Planning Board here you know.

Saints2011

snooping_around wrote: »

Give up.

As in spend your hard earned money, life is for living. you just need about 3 months pay in the bank for a rainy day. Don't bother saving for old age, the state will take care of you (that's what you are paying NI and tax for).

Dont listen to this poster.

Your only young (like me) dont panic.

- I would be looking at putting more into the Pension.
- Maybe building up a seperate emergency savings account 3-6 of living expenses.
- Keep saving for a property and all of the initial costs.

teadrinker1

Thanks for the replies everyone.

Unfortunately my company won't pay more than 5 per cent regardless of what I contribute. I suppose I could put in more but that would mean saving less than what I am doing now...saving £500 per month is the maximum I can do I think, with my rent. Maybe I could put in another £50 per month into my pension.

Maybe I'll just keep saving the way I am for a couple of years and see what happens.

These are all very small problems, relatively on this earth...

Thanks again

TD

ViolaLass

teadrinker1 wrote: »

I suppose I could put in more but that would mean saving less than what I am doing now...

You'd actually be saving more as the tax you pay on that money would also go into your pension.

atush

teadrinker1 wrote: »

you're right snooping. my thoughts exactly

ta

then go home? You came here for help and not bad advice don't you think? Follow that advice and your future will be poor.

What are you doing that will never get better only worse? why not spend money from the Rents on education (ie masters?) What do you want to do? How do you want to live?

The previous post ahtt says pension are worth more is correct as for ever quid you put in, you will get a BRTax uplift and possibly NItax too- so that could mean 100 in is worth more than 130.

Having said that, if shrt term goals include earning keep on as you have been and keep saving.

But I would look into something that would have better long term work prospects that whatver it is you are doing.

whiteside

Saints2011 wrote: »

Dont listen to this poster.

Your only young (like me) dont panic.

- I would be looking at putting more into the Pension.
- Maybe building up a seperate emergency savings account 3-6 of living expenses.
- Keep saving for a property and all of the initial costs.

Maybe take a bit from both posters and try a happy medium. I wouldn't advice you to starve yourself now in the probable false hope you can gorge yourself (in a financial sense) in your retirement. God knows what age you will retire at if you are 34 now. Similar age to myself but let me tell you a story. My mother is in early 70s and has advanced dementia. She saved obsessively all her life in the hope of a comfortable retirement. Now she is in a care home costing her personally 2500 quid a month, whilst beside her sit various other "residents" who get their entire stay funded by local authority as they had no or little savings. This is not unusual so my advice would be to put money away for a rainy day fund maybe 6 mths with if you can and not worry too much about the rest. Your salary is pretty low for London living so just do what you can. Re property its a great idea to have your own place but ONLY if you see it as a nice home with quiet and nice neighbours. Otherwise it can and may turn into a nightmare. I wouldn't assume that your own house would be a cash cow either as has been proved recently in the housing downturn. Good luck in whatever you do. Ps you said you are single. That means you still have a chance to snag a rich girl/boy and bypass your financial problems all together. ;-) lol.